Late trading


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Late trading

Late trading of mutual fund shares occurs when investors placing trades after 4 PM receive the 4 PM price. These late traders can use the information revealed after 4 PM to guide their trades: buying funds when their current value is greater than their 4 PM value and selling the funds when the reverse is true. Doing so allows them to earn expected abnormal returns at the expense of the fund's long-term shareholders.

Late-Day Trading

A practice in which a hedge fund buys or sells shares in a mutual fund after the end of a trading day, but asks the fund to record the transactions at the end of the trading day. Because the net asset value (NAV) of a mutual fund is determined at the end of each trading day, transactions that occur after the end of the trading day may distort the fund's true NAV. This allows a hedge fund to close their positions the next trading day at a profit. Late-day trading is considered unethical, but it is not illegal.
References in periodicals archive ?
Summary: Mumbai (Maharashtra) [India], Jan 29 (ANI): Indian scrips opened on a weak note but staged recovery during the late trading session on Tuesday.
on this date, and NYSE American Equities, NYSE Arca Equities, and NYSE National late trading sessions will close at 5:00 pm.
Investors greeted the move with enthusiasm, driving Twitter shares up nearly 6 percent in late trading after the announcement Thursday afternoon.
The insurers argued, among other things, that Bear Stearns could not recoup the $160 million payment as a matter of public policy since the SEC found Bear Stearns willfully violated securities laws by facilitating late trading and market timing by hedge funds.
The euro fell to $1.3363 in late trading Friday from $1.3401 late Thursday.
In this book, he analyzes the causes of the late trading and market timing scandal, examines the scandal's effects on investors, and explores the regulatory response by the New York Attorney General, the SEC, and NASD/FINRA.
In late trading, Salesforce.com shares rose $12.18 to $158.08 after touching $158.39 earlier.
Deutsche Bank's stock lost 1.1% of its value in late trading in Frankfurt on Monday.
The financier, who went to Oxford University with Mr Cameron, and Pentagon Capital Management took part in illegal late trading - when shares are bought after markets have shut.
The euro was initially bought against the dollar and the yen, but it erased the gains in late trading.
London's leading share index clawed back most of its gains in late trading but still closed down 1%, or 51.5 points, at 5040.8.
Global stocks, measured by the MSCI All-Country World Index advanced 0.62 per cent in late trading on Friday.